Summary — In April 2019, Harley-Davidson’s Technical Subcommittee (TSC) is notified by their Parts and Accessories Engineering group that the current P&A Detachables Tour-Pak kits for 2014 – current Touring models have been sold without reflectors to replace the original equipment rear reflector that may be removed on some models to install this kit. An investigation was initiated.

Harley-Davidson Motor Company determined that the P&A Detachables Tour-Pak Luggage Conversion Kits (Part No. 53000291, 53000291A and 53000567) were not equipped with reflectors to replace the factory-installed rear reflector, which may have been removed when installing this kit. Installation of these kits may cause the vehicle to fail to meet federal regulations that require motorcycles to be equipped with a red reflex reflector on the rear of the motorcycle. The absence of these reflectors could reduce the rear conspicuity of the vehicle, possibly increasing the risk of a crash. As such, these motorcycles fail to comply with the requirements of Federal Motor Vehicle Safety Standard (FMVSS) number 108, “Lamps, Reflective Devices, and Associated Equipment.”

Remedy — In August 2019, Harley-Davidson initiated a recall on certain Touring and CVO Touring motorcycles, including 2017-2019 FLHTCU, FLHTCUL, FLHTK ANV, FLHTKL, FLTRU, FLHTK, and 2016-2019 FLHTKSE, FLHTKSE ANV, and FLTRUSE models equipped with a Harley-Davidson Detachable Tour-Pak Luggage Conversion Kit (Part numbers 53000291, 53000291A, and 53000567). The kit did not include replacement rear red reflectors for the ones that are eliminated by installing this kit.

Harley-Davidson has notified owners, and dealers will install the replacement reflectors, free of charge. The recall began August 19, 2019. Owners may contact Harley-Davidson customer service at 1-800-258-2464. Harley-Davidson’s number for this recall is 0629.

When is “new,” “all-new,” “brand new,” “built from the ground up new,” “the newest,” “newer and refreshed,” advertising claims of an existing or previous Harley-Davidson really new?

Is there no objective basis by which to measure when a motorcycle is actually “new?” What do you think?

It’s been reported that motorcycle enthusiasts are holding on to their old, reliable wheels for longer stretches of time, but Harley-Davidson wants to change that and has rolled-out the “brand new” 2018 #FreedomMachine models. Dealer launch video is HERE.

They may not look very different, but the 2018 changes to the engine, frame and suspension over shadow any “new” colors, new handle bar position or new seat thread design. “All-new” is really what we’ve been promised to modernize these traditional bikes and it’s not a rehash of the old.

The quick read is that the Softail and Dyna product lines, as riders have known them previously, are gone. The Dyna family is discontinued and the Dyna nameplates are now Softails!

Softail Big-Twin cruiser models

That’s the provocative and on the 2018 model revamp, all of the models that used to be in the Dyna’s lineup — the Fat Bob, Low Rider and Street Bob — rolled into the Softail lineup — Softail Slim, Heritage Classic, Deluxe, Fat Boy and Breakout — Harley completely redesigned the Softail chassis. Not a minor cosmetic change, but a complete overhaul of the entire frame and suspension. The new under-seat mono shock rear suspension aims to offer improved ride quality, traction, and control while the triangular swingarm maintains the classic lines of a hardtail frame. The revamp also includes key accommodations for last years release of the Milwaukee-Eight, the first four-valve-per-cylinder heads engine packaged into the classic 45-degree V-twin.

From the styling department, all the new 2018 bikes have a much darker and aggressive paint scheme. It’s largely a brooding “protester” feel with colors matched and with a “masked” or blacked out engine. There are smaller changes to individual models such a color-coded inner fairings, new wheels (including a 21” one for the Road Glide) and different exhaust finishes. Oh and don’t forget that riders can now pair Bluetooth headsets with the stereo to remain wirelessly “connected” — on its top-of-the-line touring models.

I’ll address the hype right here: Your motorcycle and your smartphone are starting to have a lot in common, though only one can be used to take a selfie — at least for now.

115th Anniversary Eagle Badge

Lastly, the motor company announced the 115th Anniversary edition motorcycles. There will be two limited-edition, serialized designs with 115th Anniversary Eagle and special anniversary paints available on nine different models in 2018 to celebrate the birthday.

But, what about that peculiar…

In the social media and PR launch extravaganza for the 2018 line up earlier this week, Harley-Davidson quietly discontinued the V-Rod.

Discontinued V-Rod

The 2017 V-Rod Muscle and Night Rod Special are the final iterations of the VRSC (V-Twin Racing Street Custom) line. You may recall this motorcycle had the Revolution engine that was co-developed with Porsche and based on the VR-1000 Superbike that Harley used in competitive drag racing. It had a hydro formed tubular frame, a gas tank under the seat with round-topped airbox cover up front posing as a gas tank.

This was often referred to as the Harley for the non-Harley motorcycle rider and was a testimony that engineers and the brand were capable of doing something very different. It was introduced in 2001 and discontinued 16-years later.

It would seem that Harley-Davidson is no longer “building products that fulfill customers dreams on the drag strip!”

It could be the title of Harley-Davidson CEO, Matt Levatich’s memoir on his failed 2017 year while in charge of the Motor Company.

I happen to be riding with the HOG Lewis and Clark Expedition last week when Harley-Davidson announced their disappointing Q2’17 financial results and late to weigh in:

* Harley-Davidson net income dropped 7.7%. Sales in the U.S. were down 9.3% and 6.7% worldwide.

* Harley-Davidson now expects to ship 241,000 to 246,000 motorcycles to dealers worldwide in 2017, which is down approximately 6% to 8% from 2016.

* Harley-Davidson expects to ship 39,000 to 44,000 motorcycles in Q3’17, which is down approximately 10% to 20% from 2016.

* Approx 180 U.S. based manufacturing jobs will be cut in Menomonee Falls and Kansas City. This in addition to the 118 workers who were axed back in April this year at the York plant as some positions were being shifted to Kansas City.

For those keeping track, this is a continuation of a three-year slide by the motor company. However, during the call Mr. Levatich described what can only be called an “alternative reality” in hopes (I assume?) to reassure the financial markets and stated “we are going to build bikers first, add 2 million new Harley-Davidson riders and launch 100 brand new models during the next 10 years while growing the international business by 50%.”

Huh?

I’m being a bit snarky here, but his statement appears either woefully naïve to the point of negligence or a continuance of marketing spin. Proclaiming an unprecedented future result of this magnitude smells like stunningly wishful thinking at best or at worst plain lying. For reasons I can’t explain, why would Mr. Levatich climb up on a high-wire without a net given such an overly-optimistic prediction? Even with nearly 8-million Americans that are “sleeping license holders,” — those who have motorcycle riding credentials, but don’t own a bike — it doesn’t pencil and seems unobtainable.

I don’t know if the boardroom folks in Milwaukee read the NW Harley Blog on a regular basis and/or hang on its every word. But, we know the motor company has been continuously producing motorcycles for more than a century, yet seemingly everyone on the internet with a keyboard thinks they can do it better.

And it’s a well-established fact that internet bloggers and commenters are geniuses. They definitely know how to run a business better than a company that has been constantly producing motorcycles through two world wars, the Great Depression, and roughly 20 U.S. recessions.

Sure the motor company needs our help and I’ve got some feedback and plenty of comments. But, until the motor company calls me asking for it, I’ll look for Mr. Levatich’s memoir, which will certainly be “a deeply intimate account and a cautionary tale on the world’s most iconic motorcycle brand.

Earlier this year, the President met with Harley-Davidson exec’s and put a spotlight on the company in his address to Congress, yet there was no “Trump Bump” as the motor company reported earnings which included sharp declines in revenue and profit for the first quarter of the year.

Some of the key Q1’17 stats:
— $186.4 million in net income, or $1.05 per share, for the period ended March 26, down more than 25% from $250.5 million, or $1.36 a share, in the same period a year ago.
— Revenue was $1.5 billion, down from $1.75 billion in the first quarter of 2016.
— Motorcycle sales in the U.S. were down 5.7% in the quarter compared with a year ago and International sales fell 1.8%
— Reported motorcycle shipments fell 14.7% to 70,831 in Q1
— Market share in the 601cc-plus segment was up to 51.3%. Execs stated that the Victory liquidation helped market share.

Nothing screams Americana more than deep vehicle discounts and Harley-Davidson jumped head first into that pool by offering its dealers financial incentives to clear out the leftover 2016 motorcycles. And in an unusual move the company has purposely constrained the supply of its 2017 hottest-selling new models, including bikes with the new Milwaukee Eight engine, leaving some customers waiting to conquer the open road. All of this is happening with only 4-months until the 2018 model-year launch.

If you listened to the earnings call this week there was a lot of “feel good” expressions from management about the way the company is performing yet, there are tepid sales, a downbeat outlook, and consumer confidence numbers that don’t reflect spending behavior. Clearly households worldwide are slow to embrace new motorcycles as a way to enjoy life.

According to Harley-Davidson this is the 9th year in a row (based on IHS Market New Registrations) for motorcycles with 601+cc where they were the number one seller of new on-road motorcycles in the U.S. on both their “outreach” and “core” customers. “Outreach” is defined as four segments — young adults ages 18-34, women, African Americans and Hispanics. “Core” is defined as Caucasian men aged 35-plus.

Harley-Davidson reported that more people than ever before are discovering motorcycles and claimed that they are dominating the motorcycle market as well as being recognized as the leader in addressing key demographics — women, younger riders, African Americans and Hispanics, however, the patterns of growth remain elusive.

So whats going on?

Let’s drill down:
— Press and media continue to push negative motorcycle narratives (motorcycle crashes, distracted driving, club violence (last years Waco example) etc.).
— Increased pricing on new motorcycles have pushed out the average length of ownership. For example new autos reached 6.5 years in Q1 2015.
— In the northwest along with parts of California the wet weather has limited the number of days to ride in 2017.
— Increasing Insurance rates — on auto, home and health care biting into the discretionary funding of a motorcycle hobby.
— Income growth has declined.
— Interest rates have increased (in past years people pulled $$ from their house to buy a “toy” and now there is no where else to pull $$).
— Fewer “Outreach” customers (aged 18-34) own vehicles or don’t drive as much, they UBER.
— Apathy of the motorcycle hobby/life style as a form of entertainment

All or some elements of this could be weighing down new motorcycle purchases. But I’m an optimist, and Harley-Davidson has a 10-year strategy to train 2 million new U.S. riders, grow international business to 50% of sales (currently about 32%) and launch 100 new “high-impact” motorcycles.

As it turns out and according to this report, about 22% of all new motorcycle purchases come from first-time buyers. This figure has remained relatively stable since 2001. It’s very likely some of those 2M new riders will buy a new “high-impact” Harley.

Photos courtesy of CNBC and Harley-Davidson

Full Disclosure: I don’t currently hold or intend to hold any $HOG shares.

The marketing guru’s claim that Indian is authentic, was born with a dedication for pure performance and now are adding even more capability.

First a bit of history — the first Indian Motorcycle was sold to a retail customer back in 1902, but I’ll spare you a 100+ year recap of the motorcycle. In modern day history, the Indian Motorcycle brand has been part of Polaris Industries since 2011, and began selling new motorcycles in 2014. The motorcycles are American made and built in Spirit Lake, Iowa. The are distributed via 200 dealers across North America and nearly 450 dealers globally. You might recall that the Victory Motorcycle brand, was recently shuttered by Polaris and ceased production. To the dismay of many, many satisfied customers, it is now winding down operations after 15 years on the market leaving Indian as the only mass-produced American motorcycle brand other than Harley-Davidson.

2017 Indian Chieftain Limited

Jump ahead to April 2017 and we learn that Indian has announced expansion of its Chieftain model lineup with the addition of the Chieftain Limited and Chieftain Elite. If you’re keeping track this brings the total number of 2017 Indian models to twelve.

It should be noted that the Chieftain was one of the first three bikes that Indian released in 2014, along with the Chief Classic and Chief Vintage. Although model details differ, the bikes share a common platform — engine, transmission and chassis.

All three motorcycles come with Indian’s proprietary Thunder Stroke 111 V-Twin engine, cast aluminum frame with integrated airbox, air-adjustable single rear shock and many other shared mechanical features. As it turns out, the Chieftain was the modern-looking of the three, showcasing a unique fork-mounted hard fairing which housed its gauges and electronics, while the Chief motorcycles came with accessory windscreens.

2017 Indian Chieftain Dash

The newly announced Chieftain Limited imitates some details from the custom bagger scene. It has a skinny 19-inch front wheel replacing the 16-inch front. The “old-school” valanced front fender has been chopped to follow the design line of the wheel and exposes the mag wheel and oversized dual front brake rotors. There is a sleeker seat design, and the headlight bezel is painted, not chromed, to match the Thunder Black paint scheme. The remaining elements of the Chieftain Limited match the Chieftain feature-for-feature, including the 7-inch touchscreen-operated Ride Command Infotainment/Navigation system and hard saddlebags.

For the well-heeled enthusiasts familiar with and looking at a Harley-Davidson CVO (Custom Vehicle Operations) motorcycle, you’ll appreciate the new Chieftain Elite. Let’s start with the 12-layer paint treatment which is built on a foundation of gold paint. Black accents are added with marble textures, and the bodywork is coated with layers of Fireglow Red Candy clear. Yeah, it’s a looker with a stunning paintjob, thanks in part to that brilliant red candy color. Some of you would drop a lot of money with a custom painter to achieve this look, but this one comes direct from the factory. In addition, the Chieftain Elite gets billet floorboards, a flip windscreen, Pathfinder LED headlights and a 100-watt saddlebag audio system.

At first blush the Chieftain Elite is a factory custom that will hold its own against Harley-Davidson CVO’s. As to price? The new Chieftain Elite (starting at $31,499) and Chieftain Limited (starting at $24,499). Both motorcycles are feature rich, available now and aggressively priced compared to Harley-Davidson.

With warmer weather and longer days on the way, the new Indian Chieftain’s might be the spark of inspiration you’ll need to explore a wide-open two-lane world.

As I write this I’m reminded that I was flying home from Barcelona, Spain about this time last year after a long work week at an industry event and that every year in business is different.

A few years are easy, some are hard, and most are somewhere in between. Each year you face a different set of circumstances: changing economic, political, social and what’s cool in the billet industry.

We know from the Discovery Channel which scripted a mini-series project about the history of Harley-Davidson, that in the early years the company really struggled to survive. From month to month, they worked hard to keep from getting further behind and sinking further into debt. There were the AMF years and then came the housing bubble. Those of you who have tried or are establishing a little business of your own know that success is much harder than you envisioned it should be. Many folks think there must be “one big thing” they are missing that if discovered and remedied would turn things around and put them on the path to major prosperity.

Clearly, that isn’t the case, and over the course of a few startup years often you learn that rather than “one big thing,” there are many functions throughout the business that had to get established in good working order for the business to really succeed.

After 114 years, this still holds true for Harley-Davidson. There are no guarantees or shortcuts to success. There is only doing the hard work that needs to be done, doing it to the highest standards, and identifying the next area to establish or improve in order to build the next generation of Harley-Davidson rides and riders to control their destiny.

All of this became acute over the last week when Harley announced their Q4 and full-year 2016 financial results (HERE).

These are just words. I’m of the viewpoint that how well any company performs is a key factor in how well they succeed compared to their competition. Since we’re a few days before Super Bowl — a sports analogy is in order — how well a team executes ALL aspects of their game has everything to do with whether they win or lose.

Obviously taste in motorcycle brands, styles, or in paint schemes, is subjective. Some in the press have beaten down the overall market with reports that seem to indicate the riding “fad” has ended. Granted there’s been negative publicity with Polaris shutting down the Victory Motorcycle brand and overall motorcycle industry earnings not being great, but there are many very nice motorcycles being made, and WE the riding enthusiasts/public have lots of choices.

Why do I bring this up?

I’ve notice in my travels that many successful companies have a sense that they are masters of their own fate; their success is within their control. They know it’s a myriad of little things done well that add up to their success. And no matter what their size, they realize that a company always has the resources at hand to take their next step. Isn’t that really the “art” of it: to creatively employ existing resources to advance the ride, the employees and the company?

Most of us know the answer to a problem is rarely found outside the company; it usually comes from within. I’m confident that Harley-Davidson will find the answers and simply function better as an organization. I predict they will do a more thorough job of performing the functions a successful motorcycle company needs to and roll out compelling new products that will be industry hits.

News about Harley-Davidson during the month of August has been a bit of a wild ride.

There was the consent decree and $15M settlement with the EPA. Then the announcement that Harley expanded the list of bikes on recall that may have been built with defective hydraulic clutch systems. Then the biggest engine-product launch for the company since 1988, when the Twin Cam made its debut.

And now today, the day before the Milwaukee Rally kicks off, Harley-Davidson announced that approximately 200 employees will face layoffs starting in October as the company adjusts motorcycle production due to slower sales.

According to various news reports including Rick Barrett, of the Milwaukee Journal Sentinel, the union stated many of the layoffs will take place at Harley’s assembly plant in York, Pa., and some will occur at the engine plant in Menomonee Falls, where the company employs approximately 1,000 people, as well as in Tomahawk.

Given that the Sturgis Motorcycle Rally attendance was down roughly 40% from a year ago (some of which was expected), suggest that some riders are busy doing other things than throttling down rural America’s roads to a rally which makes the launch of its Milwaukee-Eight engine motorcycles key to amp up any new motorcycle sales.